NOTE 7 – NOTES PAYABLE

The following table summarizes notes payable as of June 30, 2026 and December 31, 2025:

The principal payments due on our notes payable for the remaining six months ending December 31, 2026 and for each of the next four years ending December 31, and thereafter were as follows (in thousands):

Streeterville Note

On March 3, 2026, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”), pursuant to which the Company issued a secured promissory note (the “Streeterville Note”) with an aggregate principal balance of $1,625,000. The Streeterville Note included an original issue discount (“OID”) of $120,000 and reimbursement of transaction expenses of $5,000, resulting in net cash proceeds to the Company of approximately $1.5 million.

The Streeterville Note bears interest at a rate of 8.0% per annum and matures 13 months from the issuance date. Beginning six months following issuance, Streeterville may redeem portions of the outstanding balance, subject to the terms and conditions of the Streeterville Note, in amounts not to exceed $50,000 per month.

In addition, beginning three months after issuance of the Streeterville Note, the Company is required to pay a monthly monitoring fee to Streeterville in accordance with the terms of the Note Purchase Agreement. The monitoring fee is recorded within interest expense over the term in which the obligation is incurred.

The Streeterville Note is secured by substantially all of the Company’s assets pursuant to a related security agreement. The obligations under the Streeterville Note contain customary events of default, including, among others, failure to make required payments, bankruptcy or insolvency events, and breaches of representations, warranties or covenants. Upon an event of default, the outstanding obligations may become immediately due and payable and may accrue interest at a default rate as defined in the agreement.

The Company evaluated the accounting treatment of the Streeterville Note under applicable accounting guidance, including ASC 470, Debt, and ASC 815, Derivatives and Hedging. The Company concluded that the OID and debt issuance costs should be recorded as a direct deduction from the carrying amount of the debt and amortized to interest expense over the term of the Streeterville Note using the effective interest method and that certain contingent payment provisions, including the monitoring fee and trigger effect provisions, could result in additional amounts becoming payable upon the occurrence or nonoccurrence of specified future events. The Company determined that these features were not clearly and closely related to the debt host and therefore were required to be bifurcated and accounted for separately as an embedded derivative liability. The fair value of the embedded derivative was determined using a probability-weighted valuation methodology that considered the expected incremental cash flows associated with the monitoring fee and trigger effects, including the probability of the applicable events and an appropriate discount rate. The embedded derivative was initially recognized at fair value as a debt discount and is subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings

Streeterville Notes A-1 and B

On June 12, 2026, the Company entered into a Notes Purchase Agreement with Streeterville pursuant to which it issued (i) a Promissory Note A-1 with an original principal amount of $2.17 million (the “A-1 Note”)and (ii) a Secured Promissory Note B with an original principal amount of $10.0 million (the “B Note” and, together with the A-1 Note, the “Notes”). The Notes mature eighteen months from issuance. The A-1 Note bears interest at 8% per annum, while the B Note bears interest at 5% per annum. Interest compounds daily based on a 360-day year.

The Company received aggregate financing proceeds of $12.0 million. Of this amount, $2.0 million was funded directly to the Company. The remaining $10.0 million was deposited into a restricted deposit account maintained pursuant to a Deposit Account Control Agreement. The funds remain restricted and serve as collateral for the B Note until released in accordance with the terms of the financing agreements.

Under the Notes Purchase Agreement, each time the aggregate stated value of the Company’s Series B Preferred Stock held by Streeterville that is retired reaches $500,000, the Company is entitled to request an exchange of $250,000 of the B Note for an A-1 Note. Upon completion of such exchange, an amount equal to the portion of the outstanding balance of the B Note exchanged is released from the restricted deposit account. If the Company does not request the exchange within the applicable 60-day period, the exchange occurs automatically on the 61st day following the applicable event.

As of June 30, 2026, the Company had 6,593 shares of Series B Preferred Stock outstanding. The Company classified $3.3 million of restricted cash expected to be released within twelve months of the balance sheet date based on anticipated reductions in the aggregate stated value of the Series B Preferred Stock as current restricted cash, with the remaining balance classified as noncurrent restricted cash.

The A-1 Note includes an original issue discount of $160,000 and a $10,000 transaction expense payable to the lender, both of which are included in the initial principal amount of the note and are being amortized as additional interest expense over the term of the borrowing using the effective interest method.

The B Note is secured by the restricted deposit account, a first-priority security interest in the membership interests of EDBL Holdings, LLC, and guarantees provided by certain wholly owned subsidiaries. Beginning six months after issuance, the lender may require monthly cash redemptions of portions of the A-1 Note and, under specified circumstances, limited redemptions of the B Note. The financing documents also permit exchanges of portions of the B Note into additional A Notes upon the occurrence of specified contractual milestones. The Company will evaluate any future exchanges under the debt modification and extinguishment guidance in ASC 470-50 when such exchanges occur.